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Land Is Better Than Property - Ive Argued. New Figures Show:

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Connaught Asset Management say average UK land prices up 1451% since 1983.

Some may recall that Ive long been a fan of land where others have argued yield is king. Thats why I bought land as opposed to property in Berlin for example as I think land values increase exponetially faster than built property values do in the event of an upswing.

Does anyone know what the increase for UK property values is since 1983?

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Guest grumpy-old-man
Connaught Asset Management say average UK land prices up 1451% since 1983.

Some may recall that Ive long been a fan of land where others have argued yield is king. Thats why I bought land as opposed to property in Berlin for example as I think land values increase exponetially faster than built property values do in the event of an upswing.

Does anyone know what the increase for UK property values is since 1983?

your prob better off waiting until later this year to answer this question, as it will alter the answer considerably Dogbox. ;)

ps - congratulations on your previous predictions btw.

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Read Fred Harrison's "Boom Bust: House Prices and the Depression of 2010" for an interesting analysis of UK land price inflation. It's not land per se, it's the economic rents attributable to that land. Hence land in central London zoned for development and close to a tube station, versus land on the side of a Scottish mountain that's of marginal agricultural value and miles from the nearest road.

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Guest d23
Connaught Asset Management say average UK land prices up 1451% since 1983.

Some may recall that Ive long been a fan of land where others have argued yield is king. Thats why I bought land as opposed to property in Berlin for example as I think land values increase exponetially faster than built property values do in the event of an upswing.

Does anyone know what the increase for UK property values is since 1983?

according to the nationwide q1 83 average houseprice was 26,307 and q107 was 175,554

looks like around 660% to me (think that equates to a 272% increase in real terms)

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Connaught Asset Management say average UK land prices up 1451% since 1983.

Some may recall that Ive long been a fan of land where others have argued yield is king. Thats why I bought land as opposed to property in Berlin for example as I think land values increase exponetially faster than built property values do in the event of an upswing.

Does anyone know what the increase for UK property values is since 1983?

This is just anecdotal but I've got a friend who wants to buy a smallholding. It works like this, you post lots and lots of "smallholding wanted" adverts and hope to hear something one day. Not quite 80 customers for every house but certainly the buyers find the sellers, not the other way round.

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Connaught Asset Management say average UK land prices up 1451% since 1983.

Some may recall that Ive long been a fan of land where others have argued yield is king. Thats why I bought land as opposed to property in Berlin for example as I think land values increase exponetially faster than built property values do in the event of an upswing.

Does anyone know what the increase for UK property values is since 1983?

Land value is derived from its use, so land value moves in step with the value of its use.

Land can out perform its use in % terms, as the value is calculated as a residual.

You are right, land has been a good investment, but it too will suffer in a crash.

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Connaught Asset Management say average UK land prices up 1451% since 1983.

Some may recall that Ive long been a fan of land where others have argued yield is king. Thats why I bought land as opposed to property in Berlin for example as I think land values increase exponetially faster than built property values do in the event of an upswing.

Does anyone know what the increase for UK property values is since 1983?

You also get hammered a lot quicker and harder if property prices start falling.

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Connaught Asset Management say average UK land prices up 1451% since 1983.

Some may recall that Ive long been a fan of land where others have argued yield is king. Thats why I bought land as opposed to property in Berlin for example as I think land values increase exponetially faster than built property values do in the event of an upswing.

Does anyone know what the increase for UK property values is since 1983?

Let me give you a clear example.

There is a city called Palm Bay in Florida where 1 acre of land sold for $40000-$50000 in 2005. It is buildable and the utilities will be in front of the lots in 2-3 years.

The same lots of land now sell for $15000-$17000. Now is May 2007.

This a 60% decrease. The cost of houses already built decreased by 20%.

So yeah, land goes up the fastest and it comes down the fastest. To buy land really means to be investor and not a stupid sheeple.

Edited by rondy

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Remember kids, there's no such thing as free money!

House prices have gone up by an average of 8% per annum since 1983. Assuming a net yield of 4% on the property and assume that all net rental income is reinvested in property, then one average house bought in 1983 would have returned approximately 1400% to date by my calculations.

It is debatable what yields have been over this 24 year period, but for most of that time they have been MUCH higher than today's yields. a net yield of 5% p.a. over this period would return 1700% in total. This would make sense, the extra 300% increase over the 1400% land increase is compensation for the "work" involved in being a landlord.

Stick that in your pipe and smoke it, Dogbox! :P

reference: Nationwide (8% average HPI since 1983).

Motley fool

Edited by Smell the Fear

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See this data:

Valuation Office Agency

In a boom land increases more than houses and in a crash land falls more than houses - same directions just exaggerated.

From £943,000 per hectare in Spring ‘89 to £529,000 (-44%) in Spring ‘91, bottoming out at £438,000 (-54%) by Spring ’93. That’s the price for residential building land in England and Wales excluding London.

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See this data:

Valuation Office Agency

In a boom land increases more than houses and in a crash land falls more than houses - same directions just exaggerated.

From £943,000 per hectare in Spring ‘89 to £529,000 (-44%) in Spring ‘91, bottoming out at £438,000 (-54%) by Spring ’93. That’s the price for residential building land in England and Wales excluding London.

Why does everyone choose to ignore yield? Houses produce a yield which can be reinvested, whereas land produces little income. see my post above to understand the power of yield and compound interest.

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